Asset Management Outlook 2024
EMBRACING NEW
REALITIES
KEY THEMES
Macroeconomy:
Living with Higher for Longer
Geopolitics:
Roadmaps for a Reshaped World
Disruptive Technology:
Innovation and AI Acceleration
Sustainability:
Investing with Impact
Portfolio Construction:
Thinking Differently
This financial promotion is provided by Goldman Sachs Bank Europe SE
WELCOME TO
A WORLD OF
NEW REALITIES
We are pleased to share Goldman Sachs Asset
Management’s 2024 Outlook: Embracing New Realities.
As the new year approaches, a new economic landscape is
taking shape. Major central banks seem prepared to keep
interest rates higher for longer, and growth paths and
inflation patterns across economies appear increasingly out
of sync. An election super cycle is about to unfold against
a backdrop of elevated geopolitical risk. Simultaneously,
megatrends including disruptive technology and
sustainability are rapidly transforming industries.
Embracing change is not easy. It requires resilience and
action to avoid being left behind—even when finding the
way forward is difficult. Most investors have adapted in
recent years to rising geopolitical risks, soaring inflation
and the disruptions caused by the pandemic. Further
adjustments will be necessary in a world of greater
growth volatility, higher capital costs and geopolitical
instability. We expect increased performance dispersion
across asset classes, sectors and regions. In these
conditions, investors face complex choices and trade-offs.
We believe active investment strategies, a focus on
diversification and risk management will be important to
navigate 2024 and help deliver alpha. In our view, it will
also be necessary to manage portfolios in an integrated
way, enhancing diversification and performance
potential by considering both traditional and alternative
investments. Focusing on long-term disruption from
sustainability trends and technological innovation,
including artificial intelligence (AI), can help position
portfolios for the global economic transformation.
Goldman Sachs Asset Management
In an age of unpredictability, dynamic insights and
solutions will be needed to steer investment. We have
synthesized views from across our investment teams and
grouped our observations around five key themes that
we expect to affect markets and investment strategies in
2024:
1) Macroeconomy: Living with Higher for Longer
2) Geopolitics: Roadmaps for a Reshaped World
3) Disruptive Technology: Innovation and AI Acceleration
4) Sustainability: Investing with Impact
5) Portfolio Construction: Thinking Differently
We hope you find our insights helpful, and we look
forward to working with you in 2024.
Marc Nachmann
Global Head of Asset & Wealth Management
Asset Management Outlook 2024
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2
KEY THEMES TO
WATCH IN 2024
05
Macroeconomy:
Living with Higher for Longer
Interest rates in developed markets are set to stay
higher for longer, and growth paths and inflation
patterns across the global economy are moving in
different directions and at different speeds. In public
equity markets, we expect macroeconomic discussions
to shift toward how specific market sectors and
companies can navigate higher capital costs and
slower growth. In public fixed income, an up-in-quality
approach to credit may help investors identify issuers
that look well-positioned to withstand higher funding
costs. We also see opportunities for a more strategic
approach to private market exposure.
08
Geopolitics:
Roadmaps for a Reshaped World
An election super cycle will unfold in 2024 against a
backdrop of elevated geopolitical risk and economic
competition between nations. Investors may need to
combine in-house expertise with insight from advisors
on the ground to navigate bouts of volatility. Companies
benefitting from the reshoring of critical supply chains
and increased investment in national security may
present compelling investment opportunities.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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3
11
Disruptive Technology:
Innovation and AI Acceleration
Artificial intelligence is now part of the long-term
technology opportunity set. Semiconductors,
cybersecurity and healthcare are areas to watch as AI
transforms industries. Skill in finding the likely winners
of tomorrow is crucial in an era of wide dispersion
between high- and low-quality growth companies.
When the initial public offering (IPO) market eventually
recovers, investors in disruptive companies may benefit.
14
Sustainability:
Investing with Impact
Sustainable investing is becoming more complex
and competitive as investors seek ways to make a
real-world impact by focusing on environmental and
inclusive-growth themes. Opportunities to invest in
sustainable solutions can be found across public and
private capital markets, from pure-play enablers of a
more sustainable world to transition leaders in highcarbon industries.
17
Portfolio Construction:
Thinking Differently
In our view, investors can navigate higher-for-longer
rates, geopolitical shocks and accelerating secular growth
trends by staying active and focusing on diversification
and risk management. An integrated approach to
portfolio construction can position portfolios to benefit
from differences in the composition and characteristics of
public and private capital markets.
Goldman Sachs Asset Management
Asset Management Outlook 2024
|
4
MACROECONOMY:
LIVING WITH HIGHER FOR LONGER
After a phase of fast and forceful monetary policy tightening,
the reality in 2024 may be that interest rates across advanced
economies stay close to present levels throughout most of
the year. In the US, we think it is plausible the US Federal
Reserve (Fed) may have reached the end of its hiking cycle as
disinflation takes hold. In our view, it’s unlikely the Fed will
move quickly toward cutting interest rates unless economic
growth slows substantially. This raises the likelihood of
higher-for-longer interest rates. In the eurozone, we believe
weaker growth momentum and a large drag from tighter
financial policy and lending conditions skew the balance of
risks towards a pause in monetary policy tightening by the
European Central Bank (ECB) before a potential pivot toward
easing in the second half of 2024.
The economic outlook remains fragile. While the Fed and ECB
seem to have steered away from a hard landing path during
the tightening cycle, exogenous shocks or a premature pivot
to policy easing may reignite inflation in a way that requires
a recession to force it lower. Conversely, further monetary
tightening might trigger a downturn just as the effects of
prior tightening begin to take hold. In the United Kingdom,
notwithstanding inflation volatility, we do not foresee
further interest rate increases by the Bank of England (BoE).
We expect slightly better—though still subdued—growth
over the near term.
Elsewhere, economies’ paths across regions are diverging,
with growth prospects and inflation patterns moving
in different directions and at different speeds. Japan’s
economy has been surprising to the upside, benefiting
from a domestic demand recovery that is driving unfamiliar
but desired wage growth and inflation. China’s short-term
growth prospects appear tilted to the downside, hampered
by property market indebtedness and demographic
headwinds. Elsewhere, early emerging market hikers—
Brazil, Chile, Hungary, Mexico, Peru, and Poland—were
the first economies to see a sharp inflation slowdown.
The central banks in these countries have started to lower
interest rates or are close to doing so.
In a desynchronized global cycle, with higher-for-longer
rates and slower growth in most advanced economies, the
road ahead remains uncertain. In our view, this calls for a
diversified and risk-conscious investment approach across
public and private markets.
We Think Policy Rates Have Likely Reached Their Peak in This Cycle
6%
February 2020
Pandemic Low
Latest
Neutral Rate Estimate
Central Bank Policy Rates (%)
5%
4%
3%
2%
1%
0%
-1%
Fed
BoE
ECB
Source: Goldman Sachs Asset Management. Macro bond. As of September 27, 2023. Neutral rate estimates are central bank projections. The neutral
rate would stabilize the economy at full employment and the inflation target, assuming other influences on the economy are at normal levels.
Pandemic low date range: December 31, 2019 to December 31, 2020.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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5
MACROECONOMY: LIVING WITH HIGHER FOR LONGER
Three Key Questions
Investment Considerations
Will we see a soft or hard landing in the US?
PUBLIC EQUITY
Our view: The latest signals from the US economy
are consistent with a soft landing. The labor market
is rebalancing and disinflation is progressing. That
said, we are mindful of the growing impact of higher
rates on the economy over time, as well as the risk
of an exogenous shock stemming, for example, from
geopolitical instability.
Less Macro, More Micro
When might investors look to add risk to
portfolios?
Our view: Given that we are late in the cycle, it may be
an opportune time to look for potential triggers for rerisking portfolios. One “risk on” signal would perhaps
be a shift in the Fed narrative hinting at a rate cut.
This may occur when economic activity, labor markets
or inflation soften sufficiently. The key differentiator
in this cycle is that rates are likely to remain higher
for longer, making security selection and active
management essential.
What are the consequences of ballooning
developed market government debt?
Our view: Today’s political climate suggests fiscal
consolidation is unlikely as governments face
pressure to address income inequality and advance
decarbonization and digitalization. Inflating away debt
isn’t an option when central banks remain committed
to inflation targeting. With these avenues for lowering
debt loads facing challenges, the primary consequence
of higher government debt will be higher term
premiums reflected in developed market government
bond yields.
The public equity market has been increasingly driven by
microeconomic factors. The share of the S&P 500 index's
median trailing six-month return that is explained by
company-specific factors rather than by macroeconomic
factors such as beta, sector and size is now nearly 30%
above the 20-year average. When beta is less likely to be
the main driver of returns, alpha generation becomes even
more critical. We expect macro discussions to shift toward
how specific companies can navigate sticky inflation, higher
capital costs and slower growth. We observe increased
market dispersion across and within sectors. This may call
for a disciplined, fundamental approach to stock selection,
with an emphasis on quality and profitability. Portfolio
drivers are likely to be a combination of high-quality firms,
strong dividend payers and regional diversification. We think
being selective at the stock level and maintaining a balanced
portfolio will be key as the market becomes more discerning.
FIXED INCOME
Strengthening Your Core
Negative fixed income returns in response to an inflation
and policy shock are an anomaly, not the trend. Following
a reset higher in bond yields, the age of "There Is No
Alternative" (TINA) to equities or other risk assets has ended.
We believe we are now in the early phases of “There Are
Reasonable Alternatives” (TARA), such as core fixed income,
including high-quality government and corporate bonds.
In the 12 and 24 months after each of the last four rate
hiking cycles, the returns of intermediate-term investment
grade government and corporate bond indices have notably
outpaced US Treasury bills on average.1 In the post-pandemic
era, we expect structural shifts such as decarbonization,
deglobalization and geopolitical instability will create more
triggers for growth volatility. Core fixed income can help to
balance portfolios through these episodes given higher yields
can provide a potential buffer. And when growth concerns
are in check, holding core bonds also makes sense given fixed
income once again delivers income.
1. Bloomberg, Goldman Sachs Asset Management. As of October 2, 2023. Returns are not tax adjusted. Indexes used: Bloomberg US Treasury Bill
Index, Bloomberg Intermediate US Govt/Credit Total Return Index, Bloomberg Municipal Bond Index Total Return Index.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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6
MACROECONOMY: LIVING WITH HIGHER FOR LONGER
Investment Considerations
FIXED INCOME
PRIVATE MARKETS
Staying Selective and Cycling On
Staying the Course
While cycles are not perfectly predictable and exhibit
variation across sectors, our assessment of the US
investment grade (IG) corporate credit market aligns
with what we perceive as mid-cycle credit dynamics.
Fundamentals remain healthy and we think US IG companies
are well positioned to withstand higher funding costs over
the coming year. Even though spreads may push wider from
current tight levels in the short term, we remain confident
in the capacity of investment grade credit to deliver
compelling risk-adjusted returns, given income potential
and resilient fundamentals. We are alert to headwinds
stemming from higher energy prices, diminished demand
from China, wage cost pressures and the growing impact of
higher interest rates over time. Companies with lower credit
ratings or unhedged, floating-rate financing, may find it
more challenging to navigate higher interest rates.
Recent surveys suggests investors are staying the course
in private markets. The investment outlook appears to
be improving, while macroeconomics and geopolitics—
including recession risks, geopolitical conflict, inflation
and higher rates—remain top of mind. Some companies
will need meaningful transformation to be well positioned
for the new market realities and secular megatrends.
The ability to make this transformation privately, away
from the quarterly earnings cycle, is one reason why some
companies are preferring private capital to public. Private
markets will continue to play a growing role in portfolios,
in our view, helping to provide return enhancement and
diversification. At the same time, the proliferation of
private investments does not diminish the need for public
markets that provide different opportunities, facilitate
quick deployment of capital and offer investors liquidity to
shift rapidly when market conditions change. In our view, it
is important that investors seek the right balance between
asset classes.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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7
GEOPOLITICS:
ROADMAPS FOR A RESHAPED WORLD
This is an era when geopolitics is increasingly important and
unpredictable. Investors and companies should prepare for
a wide range of possibilities in 2024, including the outcomes
of key political elections across the globe, from the US, UK
and South Africa to India, Taiwan and Russia. Geopolitical
tensions are likely to remain elevated, including those
between China and the US. Conflict in the Middle East and
Russia’s ongoing war in Ukraine continue to demonstrate the
importance of alliances and territorial integrity.
A packed election calendar and geopolitical instability
require a focus on both domestic developments and
global events. In the US, concerns over government debt
sustainability and the fiscal path forward may build in the
run-up to November’s presidential election. Socioeconomic
risks across countries, such as strikes in certain industries
by workers demanding higher wages, may persist in a world
of elevated inflation, forming potential drags on growth.
Rising geopolitical tensions could trigger more trade
restrictions across the globe, resulting in further economic
fragmentation. We expect economies to continue to invest
heavily in their economic security over the next 12 months
and beyond. This may be driven by developed markets
“re-shoring” and “friend-shoring” critical supply chains
that remain highly interdependent and, in some cases,
over-concentrated, such as leading-edge semiconductors.
Critical mineral supply chains are likely to receive attention
due to their growing importance for the green-energy
transition, as well as their vulnerability to supply shocks.
Complex national security threats will also remain in focus,
driving the need for the latest defense technologies and
cutting-edge cybersecurity tools.
Trade Restrictions Have More Than Tripled Since 2017
Total Number of Trade Restrictions
2500
Goods
Services
Investment
2000
1500
1000
500
0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: International Monetary Fund, Goldman Sachs Asset Management as of August 25, 2023
Goldman Sachs Asset Management
Asset Management Outlook 2024
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8
GEOPOLITICS: ROADMAPS FOR A RESHAPED WORLD
Three Key Questions
Investment Considerations
What is important to keep in mind as we head
into a year of important elections and elevated
geopolitical tensions?
ECONOMIC SECURITY IN FOCUS
Our view: We believe it is important to avoid trying
to time markets or take calls on binary political
or geopolitical outcomes. At the same time, being
unprepared for events will not serve investors well.
Given geopolitics and elections can affect risk assets
and potentially increase volatility, investors may
consider a dynamic approach to asset allocation
and security selection based on extensive
bottom-up research.
How can an evolving geopolitical environment
affect investment opportunities?
Our view: A shifting geopolitical landscape adds
new challenges and uncertainties. It also requires
new partnerships and operating models. This creates
potential public and private market investment
opportunities across supply chain security, commodity
and energy resources, and national security.
What does supply chain realignment mean for
companies?
Supply Chains, Resources
and Defense
We think companies that successfully align with corporate
and government efforts to boost the security of supply
chains and resources as well as national security will
emerge as long-term winners. We favor firms with pricing
power, durable business models and strong balance sheets.
Public equity markets may present opportunities to gain
targeted exposure to more established firms that produce
semiconductors and to semiconductor manufacturing
equipment, as well as to industrial automation and
technology companies that are facilitating the reshoring
of manufacturing. Demand for natural gas products and
reliable clean energy solutions is likely to rise as nations
seek affordable, reliable and more sustainable energy.
As security threats grow in volume and sophistication,
this creates opportunities for cybersecurity platforms
and aerospace and defense technology providers. Private
markets may provide some of the best early-stage growth
opportunities in these areas. Near-shoring can increase
demand for commercial real estate, such as modern
warehouses, and potential new infrastructure to transport
goods if shipping patterns change.
Our view: If the last decade was about producing
goods at the lowest cost, the next decade will likely see
companies focus on producing goods reliably. We expect
this trend to pick up in 2024. Ensuring greater supply
chain resiliency may result in higher costs, however,
meaning firms will need to find ways to counteract
profit margin pressures.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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9
GEOPOLITICS: ROADMAPS FOR A RESHAPED WORLD
Investment Considerations
COUNTRIES WITH COMPETITIVE ADVANTAGES
Potential Opportunities in
India and Japan
De-dollarization in a
Destabilized World?
Investors may need to draw on both global intellectual
capital and on-the-ground expertise to navigate
geopolitical risk and generate long-term outperformance.
In our view, certain countries look to have advantageous
macroeconomic positions heading into 2024 and may
emerge as long-term beneficiaries from evolving
geopolitical dynamics. In India, which is sectordiverse and benefits from resilient growth and strong
demographics, we expect more companies to become
important manufacturing partners for global corporations
diversifying their supply chains in steel, textiles, chemicals,
pharmaceuticals and automotives. Other countries
like Mexico and Vietnam could also benefit from this
trend. Japan has been experiencing an economic revival
and simultaneously strengthening alliances around
semiconductor technology with South Korea, Taiwan and
the US. Prime Minister Kishida has also committed to
reinforce Japan's defense capabilities, noting cybersecurity
and digitalization as increasingly important areas for
national security.
Investors may seek greater currency diversification because
of the upcoming election super cycle, geopolitical instability,
and divergent growth and monetary policy. This could give
rise to more institutional investor allocations and central
bank reserves potentially shifting to the euro or Chinese
yuan, alongside the US dollar. BRICS countries (Brazil,
Russia, India, China, and South Africa) are exploring the
idea of a common currency to foster and streamline trade
across the bloc. In our view, de-dollarization poses little risk
of changing the global currency order in the foreseeable
future, but we also acknowledge that it may be a part of a
decades-long trend. We think it is less likely that a single
new contender overtakes the US dollar as the world’s reserve
currency, and more likely that several currencies grow in
reserve share, as has been the case for the past two decades.
Until then, we believe de-dollarization will remain a popular
headline but an unlikely story.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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10
DISRUPTIVE TECHNOLOGY:
INNOVATION AND AI ACCELERATION
After a breakthrough year for generative AI, investors will
look for signs that new deep learning tools and techniques
are filtering through to more industries. We think artificial
intelligence has emerged as a core part of the long-term
technology opportunity set. We expect the shift from the
excitement phase into the deployment phase to continue in
2024, helping to raise global productivity and potentially
helping address challenges coming from unfavorable
demographics in some countries.
The semiconductor and semiconductor capital equipment
industries—the hardware underlying the entire AI buildout—
are in focus, with recent AI advances and growing adoption of
cloud computing fueling demand for increasingly advanced
data centers. Cybersecurity companies are also adopting
cutting-edge AI techniques to automate the identification
of potential threats and real-time response to security
incidents. Healthcare could be an industry to watch given
AI’s potential to transform complex biological data into
meaningful insights, with implications for drug development,
medical technology and digital healthcare.
Despite a tighter funding environment, disruptive tech
company fundamentals have been inflecting positively
in recent quarters as more investors place a premium
on innovation that drives future earnings growth. But
while there are tailwinds—including sources of inflation
decelerating meaningfully—discernment will be key in
2024. We are in an era of wider dispersion between highand low-quality growth companies.
The long-awaited recovery in deal activity has yet to
materialize after a two-year drought, but signs of life in
the IPO market are spurring investor optimism that more
companies will be able to go public. When the IPO market
eventually recovers, public market investors will be able to
access new opportunities, while venture capital and growth
equity investors may see liquidity returning, which can
facilitate new investments in the innovators of tomorrow.
AI’s Potential Boost to Productivity Growth Over the Next Decade
2.0
EM
DM
Global
1.8
Percentage Points
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
In d
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V ie t y a
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Mai
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dC a
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P h il a d o r
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0.0
Source: Goldman Sachs Global Investment Research. As of October 29, 2023.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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11
DISRUPTIVE TECHNOLOGY: INNOVATION AND AI ACCELERATION
Three Key Questions
Investment Considerations
How can public equity investors take advantage of
new disruptive tech opportunities?
INVESTING IN INNOVATION AND AI
Our view: We see a disconnect between where most
investors are positioned and the most compelling
potential opportunities. Investors who look to
complement their existing exposure to mega-cap
US technology companies with allocations to other,
often less well-known, technology firms, may be
able to access secular winners that are relatively
underappreciated by the broader market.
Why is AI development important for the
investment industry?
Our view: Generative AI technologies can process
vast amounts of information quickly and accurately.
This helps investors make more informed decisions
by detecting trends and patterns, including data
relationships that may be difficult or even impossible
for humans to identify.
What’s key to remember when introducing any new
technology into business models?
Our view: Technology as a standalone thesis is
not sufficient to drive returns. Success is based on
strategy and execution. Firms must implement the
right processes, structures and frameworks to exploit
technology efficiently. For instance, identifying and
implementing specific use cases for generative AI that
will stimulate business growth will likely be key in
driving strong returns on investment.
Goldman Sachs Asset Management
Software and Hardware:
Components of Success
A rapidly evolving ecosystem of software and hardware
solutions presents compelling potential investment
opportunities in 2024. On the software side, enterprise
spending on digitalization continues to increase. We
also see opportunities in cybersecurity. Digital attacks
are becoming increasingly sophisticated, frequent and
damaging. Financial technology (fintech) firms also appear
to be primed for growth. Cash is no longer king, and digital
payments are growing. There continue to be new market
opportunities within business-to-business payments.
On the hardware side, capital expenditure on the most
advanced equipment used to produce semiconductors has
been growing rapidly. This is driven by both advancements
in AI, which necessitate new chip designs, and the
reshoring of semiconductor production by developed
countries to bolster the resilience of their supply chains.
Healthcare: Diagnosing
Transformation
AI is affecting areas of healthcare in remarkable ways. For
example, AI algorithms can distinguish real heart attacks
from false alarms with astonishing accuracy. An AI-powered
smart implant for knee procedures can detect patients’
motion post-surgery, delivering real-time recovery insights
to medical staff. We see some of the most compelling
AI-related investment opportunities in drug development
for precision medicine, tech-enabled procedures and
digital healthcare. Outside of AI, novel treatments for
obesity and Alzheimer’s disease are presenting investment
opportunities in 2024, creating new blockbuster drug
categories. These advancements are spurring hope that
an illness affecting hundreds of millions of people globally
may be cured. Across healthcare and life sciences, we favor
innovative companies with strong fundamentals and unique
competitive advantages in their markets.
Asset Management Outlook 2024
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12
DISRUPTIVE TECHNOLOGY: INNOVATION AND AI ACCELERATION
Investment Considerations
INVESTING IN INNOVATION AND AI
A Quantitative and Systematic
Investment Approach
Although it may seem like a recent phenomenon, the origins
of AI can be traced back to the 1950s and techniques have
been evolving ever since. However, today’s tools, such as
large language models, are far more powerful. We expect it
will become increasingly important for investors to leverage
new AI techniques to systematically extract information
from data to inform investment decisions, particularly in
public equity markets. Investors are increasingly relying
on data that is larger, more complex, and less structured in
nature. For instance, financial news articles, earnings call
transcripts, analyst research reports and regulatory filings
are frequently used to complement financial metrics and
market data. The exponential growth of this type of data will
require new and robust techniques to extract meaningful
insights and maintain an informational edge in markets. This
can be particularly valuable when investing in larger, more
dispersed markets, such as small caps or emerging market
equities, which have persistent informational inefficiencies.
Goldman Sachs Asset Management
Asset Management Outlook 2024
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13
SUSTAINABILITY:
INVESTING WITH IMPACT
There is an increasing need for tangible solutions to
manage the worst effects of the changing climate and
drive economy-wide decarbonization. This is increasing
both ambition and action from governments, companies
and investors. We expect this focus to intensify in 2024
and drive more capital toward sustainable solutions,
from pure-play enablers of a more sustainable world to
transition leaders in high-carbon industries. At the same
time, we recognize climate finance is becoming increasingly
complex and competitive. There’s also a need to balance
short-term needs, such as resource security and energy
affordability, with long-term climate ambitions.
To find the most compelling opportunities and achieve
real-world impact in reducing emissions, we believe
investors must ensure they measure what matters and
avoid overemphasizing backward-looking emissions
data. We expect more investors to track decarbonization
at a granular level, assessing progress asset by asset,
investment manager by investment manager. The use of
more complete metrics is also likely to expand in 2024
as investors seek to properly quantify the real-world
impact of individual assets. Some of the highest-emitting
geographies, sectors and companies present the greatest
opportunity for immediate and tangible carbon reduction
and a strong investment case for discerning investors able
to find the transition winners.
We think investors will increasingly use AI technology to
analyze new sustainability datasets and find value amid
the noise. We also expect AI to accelerate progress across
a variety of sustainability investment objectives. These
include renewable energy optimization (battery storage,
weather forecasting to optimize solar and wind farm
operations) and power use optimization of physical assets
(data center efficiency, manufacturing efficiencies). New AI
models are also being developed to better predict natural
disasters like floods, hurricanes, and wildfires.
Investors will need to monitor the impact of climate policy
in 2024. The US Inflation Reduction Act’s clean-energy
incentives have encouraged companies to announce a wide
variety of investments, with more set to come. The law
has also prompted responses around the world, including
plans from the European Union (EU) to increase the speed
of its energy transition. We see potential for other markets,
such as China and India, to add climate incentives over the
coming quarters.
Emissions Are Concentrated in a Handful of Sectors
Scope 2
20
Scope 3
79% of emissions are generated by sectors representing 22% of the market
15
10
5
Equity REITs
Professional Services
Software & Services
Consumer Services
Household Products
Real Estate
Development
Telecoms
Media &
Entertainment
Insurance
Pharma, Biotech &
Life Sciences
Semiconductors
Financial Services
Consumer
Discretionary
Consumer Durables
& Apparel
Healthcare Equipment
& Services
Consumer Staples
Transportation
Tech Hardware &
Equipment
Banks
Food & Beverages
Utilities
Autos &
Components
Capital Goods
Materials
0
Energy
Emissions (gigatons Co₂e)
Scope 1
25
Source: MSCI. As of November 2022. For illustrative purposes only. Net zero refers to a state in which the amount of GHG emissions into the
environment is equal to or less than the amount removed from the environment. 22% of the market as denoted by MSCI ACWI, as of November 2022.
Note: For accounting and reporting purposes, many companies break their emissions into three “scopes” defined in the Greenhouse Gas Protocol.
Scope 1 covers direct GHG emissions from sources owned or controlled by the company. Scope 2 refers to indirect GHG emissions from the generation
of purchased electricity consumed by the company. Scope 3 covers all other indirect emissions that result from the activities of a company but occur
from sources that it neither owns nor controls. Examples include waste disposal and the use of sold products and services. See “The Greenhouse Gas
Protocol: A Corporate Accounting and Reporting Standard,” The Greenhouse Gas Protocol Initiative. As of March 2004.
Goldman Sachs Asset Management
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SUSTAINABILITY: INVESTING WITH IMPACT
Three Key Questions
Investment Considerations
What is the best way to assess a company’s
real-world impact?
PRIVATE MARKETS
Our view: Assessing a company’s potential to deliver
real-world impact requires both historical data and
forward-looking metrics, such as green capex targets.
In other words, don’t drive a car only looking in the
rearview mirror. Setting metrics and monitoring
progress over time is critical to assess progress.
Another option is mapping the impact of portfolios
through the lens of the United Nations’ Sustainable
Development Goals (SDGs).
How is sustainability developing as an
investment theme?
Our view: We see a realization among investors that
potential return opportunities from sustainable
investing are not only attractive and significant, but
also increasingly competitive. It’s important to develop
a thesis of where nascent, emerging and mature
opportunities exist and use different asset classes
and investment approaches to meet the investment
need and thesis. We are seeing a growing number of
investment funds that provide capital and financial
incentives for high-carbon industry leaders to step up
their decarbonization efforts. Furthermore, as investors
turn their attention to social issues, the theme of
inclusive growth is gaining prominence.
Evolving Opportunities
Many investors have embraced sustainability and committed
to net-zero emission targets. Over the past decade, most of
these efforts have been focused on public markets where
goals can be achieved through negative screens and sector
tilts, as opposed to investing in proactive climate solutions.
We think private markets are well-positioned to finance
long-term sustainability investments that may require
significant capital investment and time to compound, given
the closed-end nature of the fund model and insulation
from the quarterly reporting cycle of public capital markets.
Additionally, many opportunities in high-emitting areas
such as forestry, waste and agriculture are less accessible
in public markets. Private markets provide access to
the climate theme at the earliest stages of a company’s
commercial and technological development (growth
equity and venture capital), in more developed areas with
established business models (private equity), and even
assets with yield-oriented return profiles (real estate and
infrastructure). While earlier in development, the inclusive
growth theme in private markets is maturing and expanding
in a similar fashion.
How do you define inclusive growth investing, and
why is it expanding?
Our view: Inclusive growth investing is an
acknowledgement that the global economy would be
larger, faster-growing and more sustainable if we could
bring more economic participants into the mainstream
economy. We expect this theme to mature and expand in
2024. There is a strong economic case for closing access
gaps for underserved populations, because inequality
results in decreased aggregate demand and slower
economic growth than would be possible if these groups
were fully engaged.
Goldman Sachs Asset Management
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SUSTAINABILITY: INVESTING WITH IMPACT
Investment Considerations
PUBLIC EQUITY
FIXED INCOME
Impact Themes
Green Bond Growth Ahead
Public equity markets provide opportunities to invest in
sustainable solution providers that seek to make a positive
impact on society and the environment. Software providers
focused on societal solutions could offer investment
exposure to themes like digital inclusion or access to
affordable education. Investing in financial institutions
or healthcare providers that target underserved parts of
the population may achieve both real-world impact and
generate attractive financial returns. Investors looking
to generate returns while improving access to clean and
affordable energy may consider global renewable energy
leaders. At the same time, investing in high-emission
companies can also have a tangible impact. In some
cases, the valuation of carmakers or traditional energy
firms may be discounted due to the risks related to their
environmental footprint. By financing their decarbonization,
investors can support emission reductions and find financial
return opportunities. Sustainability-minded investors could
consider a bottom-up approach to find companies that align
with Sustainable Development Goals (SDGs) and engage
with them to achieve positive environmental, social, as well
as financial outcomes.
Sustainable investors have a growing range of fixed income
securities to choose from. The biggest market by far is
in green bonds, which finance only projects or activities
with a specific environmental purpose such as renewable
energy, clean transportation and green buildings. The
global green bond market is now above $2.3 trillion,
driven by Europe and momentum in Asia.2 Sovereigns and
companies have been stepping up their environmental
ambitions. We expect this growth to continue, driven by
the three main forces behind its rapid expansion in recent
years: increasing issuance to finance the energy transition
and address physical climate risks; strong investor demand
to combine potentially attractive returns with helping
shift to a low-carbon economy; and support from policy
makers by creating incentives and setting standards that
encourage green investment. We believe growth in the US
will pick up over time as green bonds gradually become a
mainstream segment in the world’s largest fixed income
market. In emerging markets, which accounted for 23% of
global green bond volume in 2022,3 green bonds could allow
companies and governments to broaden their investor base
by appealing to sustainable investors.
2. Goldman Sachs Asset Management, Bloomberg. As of October 19, 2023
3. “Sustainable Debt: Global State of the Market 2022,” Climate Bonds Initiative. As of April 2023. Developed markets accounted for 67% of green
bond volume in 2022, and supranational issuers made up 9%.
Goldman Sachs Asset Management
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PORTFOLIO CONSTRUCTION:
THINKING DIFFERENTLY
We believe higher-for-longer interest rates, elevated
geopolitical risk and accelerating megatrends call for new
approaches to portfolio construction. Investors may have
to think differently to capture the best opportunities. In
our view, the way forward is staying active combined with
a greater focus on diversification and risk management.
It’s also important to have an integrated approach to
portfolio construction, benefiting from differences in
the composition and characteristics of public and private
capital markets.
Active Investment Management
A stronger tilt toward active strategies may help investors
navigate increased performance dispersion in 2024,
as companies adapt to higher-for-longer rates and
powerful secular growth themes. Rising capital costs will
challenge business models that rely on high leverage,
cheap borrowing, and ample liquidity, so a focus on strong
balance sheets will be important. We believe finding the
next generation of winners on the right side of disruptive
technology and sustainability will require investors to be
nimble and look beyond benchmarks.
Diversification and Risk Management
We believe downside risk, left-tail events and external
shocks will be more common than they were in the
pre-pandemic world characterized by easy monetary
conditions, low inflation, and relative geopolitical stability.
Thoughts about the next potential external shock should
never be far from an effective investor’s mind in today’s
markets. The new realities of higher interest rates and
geopolitical risk call for less leverage and more attention
to liquidity and risk management. Global diversification
may also add value to the portfolios as economies diverge
and move at their own pace.
An Integrated Approach to Portfolio Construction
Investors can potentially benefit from differences in the
composition and characteristics of public and private capital
markets by using an integrated approach to investing.
For instance, exposure to high secular growth and real
assets are areas where public and private investments can
strategically complement each other. We believe optimizing
exposures simultaneously in a portfolio can lead to better
expected risk-return outcomes. This holistic optimization
and portfolio construction approach can provide a
framework for managing liquidity at a portfolio level.
Long-term Institutional Investors Tend to Have the Most Balanced Allocations
Alternatives
Equity
Fixed Income
Cash
Other
Family Offices
Corporates
Endownment & Foundations
Pension Funds
Sovereign Wealth Funds
Superannuation Schemes
Wealth Managers
Asset Managers
Government Agencies
Insurers
Banks
0
20
40
60
Portfolio Composition (%)
80
100
Source: Preqin, Goldman Sachs Global Investment Research. As of June 30, 2023. AuM coverage ca. $12 trillion.
Goldman Sachs Asset Management
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PORTFOLIO CONSTRUCTION: THINKING DIFFERENTLY
Three Key Questions
Investment Considerations
What does today’s complex investment environment
mean for asset owners’ governance models?
PRIVATE MARKETS
Our view: The new investment realities are likely
to require more tactical asset allocation. More
asset owners may be drawn to the outsourced chief
investment officer (OCIO) model, which involves
outsourcing parts of their portfolio management. This
can allow for the nimble implementation of investment
views and management of private asset classes at
organizations that may not have the resources to hire
investment specialists.
Is the private equity model still viable in a higher
rate environment?
Our view: The history of private equity shows that
managers have been able to generate value in different
market environments, including periods of elevated
interest rates. Value creation playbooks have evolved
over the past 40 years as the market environment
changed. Over the past decade, the low cost of debt
provided an industry-wide tailwind that we believe
will be unlikely going forward. We believe the value
creation playbook will need to change again, with a
greater focus on operational improvements in portfolio
companies. With a greater component of value creation
coming from manager skill, and less from overall market
direction, performance dispersion may increase and
illuminate managers’ capabilities.
How can investors manage emerging market
equity exposures as China’s economy experiences
challenges?
Our view: We continue to view emerging markets
equities ex-China as a diverse and distinct asset class,
one that presents potential alpha opportunities.
If China’s economy continues to diverge from the
emerging market universe, we expect more investors
to adopt different approaches and allocations when
determining how best to invest in China, for example
by splitting EM allocations into China and EM ex-China.
This strategy can provide investors with flexibility to
time their exposure to China and manage related risks
separately from other emerging markets.
Goldman Sachs Asset Management
The Many Faces of Private Credit
Private credit was perhaps the most-discussed investment
strategy of 2023, and we expect strong interest to
continue, aided by structurally higher interest rates
compared with the past 15 years. We believe investors
should consider looking beyond a single, monolithic
definition of private credit, employing a more granular
and sophisticated approach to allocating across private
credit strategies. Diversification approaches can consider
differences in the capital structure, underlying borrower
and collateral, and economic cycle sensitivity. The universe
of private credit encompasses strategies that move with
the economic cycle (i.e., performing credit); strategies
that may be counter-cyclical, offering more attractive
investment opportunities when the economy is challenged
(i.e., distressed); and strategies that may be less cyclical
(e.g., hybrid capital). Market dislocations may provide
interesting opportunities in select sectors (e.g., real estate
credit). Integrating multiple strategies into a portfolio
calls for an asset-class specific portfolio construction and
implementation framework, in our view.
Secondaries Are a Primary Concern
Private capital market fundraising declined in 2023, but
there is one strategy that has bucked the trend: secondaries.
Today, with more than $10 trillion invested across private
equity, real estate, infrastructure and credit assets, the
secondary market provides liquidity across private market
strategies. Limited partners (LPs) can sell their private fund
stakes to adapt their portfolios to changing conditions. By
purchasing into a known pool of assets, investors potentially
have more transparency. General partners (GPs) have
been turning to secondary markets to provide liquidity for
their investors and extend hold periods for prized assets
in aging funds, obviating the need to sell into unfavorable
markets. As secondaries activity evolves to include more
bespoke solutions, investors need to consider the risk-return
implications of potentially different transaction types.
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PORTFOLIO CONSTRUCTION: THINKING DIFFERENTLY
Investment Considerations
DIVERSIFIERS
Hedge Funds
Some investors are questioning whether the diversification
benefits of traditional asset allocation are less effective
in an inflationary and higher-for-longer interest rate
environment. We expect this will lead to a renewed focus
on the role of hedge funds and their ability to provide a
differentiated source of portfolio return. The environment
may remain attractive for tactical trading funds in the
medium term. This may particularly apply to global macro
managers who seek to profit from divergent monetary and
fiscal policies in developed and emerging economies as
inflation normalizes in certain countries while remaining
problematic elsewhere. As market dynamics evolve, many
hedge funds adapt and seek out opportunities in burgeoning
areas. AI is a prime example — both as an investment
thesis, as well as a tool to generate and execute investment
ideas. The falling availability of traditional sources of debt
financing is also leading borrowers to seek out hedge funds
as lenders in the rapidly growing private credit market.
Goldman Sachs Asset Management
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DISCLOSURES
Glossary
Alpha refers to returns in excess of the benchmark return.
Beta refers to the tendency of a security’s returns to respond to swings
in the markets.
The Bloomberg Municipal Bond Index is a rules-based, market-valueweighted index engineered for the long-term tax-exempt bond market.
The Bloomberg US Intermediate Government/Credit Bond Index is
composed of US dollar-denominated government, government-related
and investment-grade US corporate bonds with remaining maturities
between one and ten years.
The Bloomberg US Treasury Bill Index tracks the market for treasury
bills issued by the US government.
Developed market refers to countries with developed economies and
capital markets that are sufficiently liquid and accessible.
Disinflation is a decrease in the rate of inflation.
Friend-shoring refers to the process of returning supply chain networks
back to countries regarded as political and economic allies.
Green bonds are standard fixed income securities with a green element.
Their financial characteristics such as structure, risk and return are
similar to those of traditional bonds. The main difference is that the
money raised is used exclusively to finance projects or activities with a
specific environmental purpose.
Green capex refers to capital expenditure made in environmentally
sustainable economic activities.
Green energy includes energy types generated from natural resources,
such as sunlight, wind or water.
Long-term investor refers to an investor with debt and or equity
investments with maturities or benefits lasting more than one year.
Pure-play refers to an investment opportunity that focuses its efforts
and resources on one line of business.
Risk assets are those with a high degree of risk and volatility, such as
such as equities, high-yield credit, commodities and currencies.
Re-risking refers to an increase in exposure to return-seeking assets to
generate additional return.
Re-shoring refers to the process of returning the production and
manufacturing of goods back to the company's original country.
Soft landing refers to an environment in which the Federal Reserve
tightens monetary policy to fight inflation without causing a US recession.
S&P 500 Index is the Standard & Poor’s 500 Composite Stock Prices
Index of 500 stocks, an unmanaged index of common stock prices.
Risk Considerations
Goldman Sachs Asset Management
All investing involves risk, including loss of principal.
Environmental, Social and Governance (“ESG”) strategies may take
risks or eliminate exposures found in other strategies or broad
market benchmarks that may cause performance to diverge from the
performance of these other strategies or market benchmarks. ESG
strategies will be subject to the risks associated with their underlying
investments’ asset classes. Further, the demand within certain markets
or sectors that an ESG strategy targets may not develop as forecasted
or may develop more slowly than anticipated.
Equity investments are subject to market risk, which means that the
value of the securities in which it invests may go up or down in response
to the prospects of individual companies, particular sectors and/or
general economic conditions. Different investment styles (e.g., “growth”
and “value”) tend to shift in and out of favor, and, at times, the strategy
may underperform other strategies that invest in similar asset classes.
The market capitalization of a company may also involve greater risks
(e.g. "small" or "mid" cap companies) than those associated with larger,
more established companies and may be subject to more abrupt or
erratic price movements, in addition to lower liquidity.
Private equity investments are speculative, highly illiquid, involve a high
degree of risk, have high fees and expenses that could reduce returns,
and subject to the possibility of partial or total loss of fund capital; they
are, therefore, intended for experienced and sophisticated long-term
investors who can accept such risks.
Investments in fixed income securities are subject to the risks
associated with debt securities generally, including credit, liquidity,
interest rate, prepayment and extension risk. Bond prices fluctuate
inversely to changes in interest rates. Therefore, a general rise in
interest rates can result in the decline in the bond’s price. The value
of securities with variable and floating interest rates are generally
less sensitive to interest rate changes than securities with fixed
interest rates. Variable and floating rate securities may decline in
value if interest rates do not move as expected. Conversely, variable
and floating rate securities will not generally rise in value if market
interest rates decline. Credit risk is the risk that an issuer will default on
payments of interest and principal. Credit risk is higher when investing
in high yield bonds, also known as junk bonds. Prepayment risk is the
risk that the issuer of a security may pay off principal more quickly
than originally anticipated. Extension risk is the risk that the issuer of a
security may pay off principal more slowly than originally anticipated.
All fixed income investments may be worth less than their original cost
upon redemption or maturity. High-yield, lower-rated securities involve
greater price volatility and present greater credit risks than higherrated fixed income securities
International securities may be more volatile and less liquid and are
subject to the risks of adverse economic or political developments.
International securities are subject to greater risk of loss as a result
of, but not limited to, the following: inadequate regulations, volatile
securities markets, adverse exchange rates, and social, political,
military, regulatory, economic or environmental developments, or
natural disasters.
An investment in private credit and private equities is not suitable
for all investors. Investors should carefully review and consider the
potential investments, risks, chargers, and expenses of private equity
before investing. They are speculative, highly illiquid, involve a high
degree of risk, have high fees and expenses that could reduce returns,
and subject to the possibility of partial or total loss of capital. They
are, therefore, intended for experienced and sophisticated long-term
investors who can accept such risks.
Alternative investments are suitable only for sophisticated investors
for whom such investments do not constitute a complete investment
program and who fully understand and are willing to assume the risks
involved in Alternative Investments. Alternative Investments by their
nature, involve a substantial degree of risk, including the risk of total
loss of an investor’s capital.
Asset Management Outlook 2024
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Alternative Investments often engage in leverage and other investment
practices that are extremely speculative and involve a high degree of
risk. Such practices may increase the volatility of performance and the
risk of investment loss, including the loss of the entire amount that is
invested. There may be conflicts of interest relating to the Alternative
Investment and its service providers, including Goldman Sachs and its
affiliates. Similarly, interests in an Alternative Investment are highly
illiquid and generally are not transferable without the consent of the
sponsor, and applicable securities and tax laws will limit transfers.
Investors should also consider some of the potential risks of alternative
investments:
Alternative Strategies. Alternative strategies often engage in leverage and
other investment practices that are speculative and involve a high degree
of risk. Such practices may increase the volatility of performance and the
risk of investment loss, including the entire amount that is invested.
Manager experience. Manager risk includes those that exist within a
manager’s organization, investment process or supporting systems and
infrastructure. There is also a potential for fund-level risks that arise
from the way in which a manager constructs and manages the fund.
Leverage. Leverage increases a fund’s sensitivity to market movements.
Funds that use leverage can be expected to be more “volatile” than
other funds that do not use leverage. This means if the investments a
fund buys decrease in market value, the value of the fund’s shares will
decrease by even more.
Counter-party risk. Alternative strategies often make significant use
of over- the- counter (OTC) derivatives and therefore are subject to the
risk that counter-parties will not perform their obligations under such
contracts.
Liquidity risk. Alternatives strategies may make investments that
are illiquid or that may become less liquid in response to market
developments. At times, a fund may be unable to sell certain of its
illiquid investments without a substantial drop in price, if at all.
Valuation risk. There is risk that the values used by alternative
strategies to price investments may be different from those used by
other investors to price the same investments.
Alternative investments are suitable only for sophisticated investors
for whom such investments do not constitute a complete investment
program and who fully understand and are willing to assume the risks
involved in Alternative Investments. Alternative Investments by their
nature, involve a substantial degree of risk, including the risk of total
loss of an investor’s capital.
Alternative Investments often engage in leverage and other investment
practices that are extremely speculative and involve a high degree of
risk. Such practices may increase the volatility of performance and the
risk of investment loss, including the loss of the entire amount that is
invested. There may be conflicts of interest relating to the Alternative
Investment and its service providers, including Goldman Sachs and its
affiliates. Similarly, interests in an Alternative Investment are highly
illiquid and generally are not transferable without the consent of the
sponsor, and applicable securities and tax laws will limit transfers.
Investors should also consider some of the potential risks of alternative
investments:
•
Alternative Strategies. Alternative strategies often engage in
leverage and other investment practices that are speculative
and involve a high degree of risk. Such practices may increase the
volatility of performance and the risk of investment loss, including
the entire amount that is invested.
•
Manager experience. Manager risk includes those that exist within
a manager’s organization, investment process or supporting
systems and infrastructure. There is also a potential for fund-level
risks that arise from the way in which a manager constructs and
manages the fund.
•
Leverage. Leverage increases a fund’s sensitivity to market
Goldman Sachs Asset Management
movements. Funds that use leverage can be expected to be more
“volatile” than other funds that do not use leverage. This means if
the investments a fund buys decrease in market value, the value of
the fund’s shares will decrease by even more.
•
Counter-party risk. Alternative strategies often make significant
use of over- the- counter (OTC) derivatives and therefore are
subject to the risk that counter-parties will not perform their
obligations under such contracts.
•
Liquidity risk. Alternatives strategies may make investments that
are illiquid or that may become less liquid in response to market
developments. At times, a fund may be unable to sell certain of its
illiquid investments without a substantial drop in price, if at all.
•
Valuation risk. There is risk that the values used by alternative
strategies to price investments may be different from those used
by other investors to price the same investments.
Alternative Investments - Hedge funds and other private investment
funds (collectively, “Alternative Investments”) are subject to less
regulation than other types of pooled investment vehicles such as
mutual funds. Alternative Investments may impose significant fees,
including incentive fees that are based upon a percentage of the
realized and unrealized gains and an individual’s net returns may
differ significantly from actual returns. Such fees may offset all or a
significant portion of such Alternative Investment’s trading profits.
Alternative Investments are not required to provide periodic pricing or
valuation information. Investors may have limited rights with respect to
their investments, including limited voting rights and participation in
the management of such Alternative Investments.
Real estate investments are speculative and illiquid, involve a high
degree of risk and have high fees and expenses that could reduce
returns. These risks include, but are not limited to, fluctuations in
the real estate markets, the financial conditions of tenants, changes
in building, environmental, zoning and other laws, changes in real
property tax rates or the assessed values of Partnership Investments,
changes in interest rates and the availability or terms of debt financing,
changes in operating costs, risks due to dependence on cash flow,
environmental liabilities, uninsured casualties, unavailability of or
increased cost of certain types of insurance coverage, fluctuations
in energy prices, and other factors not within the control of the
General Partner, such as an outbreak or escalation of major hostilities,
declarations of war, terrorist actions or other substantial national
or international calamities or emergencies. The possibility of
partial or total loss of an investment vehicle’s capital exists, and
prospective investors should not invest unless they can readily bear the
consequences of such loss.
The above are not an exhaustive list of potential risks. There may be
additional risks that are not currently foreseen or considered.
Conflicts of Interest
There may be conflicts of interest relating to the Alternative Investment
and its service providers, including Goldman Sachs and its affiliates.
These activities and interests include potential multiple advisory,
transactional and other interests in securities and instruments that
may be purchased or sold by the Alternative Investment. These are
considerations of which investors should be aware and additional
information relating to these conflicts is set forth in the offering
materials for the Alternative Investment.
General Disclosures
This material is provided for educational purposes only and should not
be construed as investment advice or an offer or solicitation to buy or
sell securities.
The portfolio risk management process includes an effort to monitor
and manage risk, but does not imply low risk.
THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN
ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE
UNAUTHORIZED OR UNLAWFUL TO DO SO.
Asset Management Outlook 2024
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Diversification does not protect an investor from market risk and does
not ensure a profit.
There is no guarantee that objectives will be met.
Prospective investors should inform themselves as to any applicable
legal requirements and taxation and exchange control regulations in
the countries of their citizenship, residence or domicile which might be
relevant.
Economic and market forecasts presented herein reflect a series of
assumptions and judgments as of the date of this material and are
subject to change without notice. These forecasts do not take into
account the specific investment objectives, restrictions, tax and
financial situation or other needs of any specific client. Actual data will
vary and may not be reflected here. These forecasts are subject to high
levels of uncertainty that may affect actual performance. Accordingly,
these forecasts should be viewed as merely representative of a broad
range of possible outcomes. These forecasts are estimated, based on
assumptions, and are subject to significant revision and may change
materially as economic and market conditions change. Goldman Sachs
has no obligation to provide updates or changes to these forecasts.
Case studies and examples are for illustrative purposes only.
This information discusses general market activity, industry or sector
trends, or other broad-based economic, market or political conditions
and should not be construed as research or investment advice. This
material has been prepared by Goldman Sachs Asset Management
and is not financial research nor a product of Goldman Sachs Global
Investment Research (GIR). It was not prepared in compliance with
applicable provisions of law designed to promote the independence of
financial analysis and is not subject to a prohibition on trading following
the distribution of financial research. The views and opinions expressed
may differ from those of Goldman Sachs Global Investment Research
or other departments or divisions of Goldman Sachs and its affiliates.
Investors are urged to consult with their financial advisors before
buying or selling any securities. This information may not be current
and Goldman Sachs Asset Management has no obligation to provide any
updates or changes.
THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY
WILL NOT CONSTITUTE INVESTMENT ADVICE AND WILL NOT FORM A
PRIMARY BASIS FOR ANY PERSON’S OR PLAN’S INVESTMENT DECISIONS,
AND GOLDMAN SACHS IS NOT A FIDUCIARY WITH RESPECT TO ANY
PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR
CONTENT HEREIN. PLAN FIDUCIARIES SHOULD CONSIDER THEIR OWN
CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE
OF ACTION.
The views expressed herein are as of the date of the material and
subject to change in the future. Individual portfolio management teams
for Goldman Sachs Asset Management may have views and opinions
and/or make investment decisions that, in certain instances, may not
always be consistent with the views and opinions expressed herein.
Views and opinions expressed are for informational purposes only
and do not constitute a recommendation by Goldman Sachs Asset
Management to buy, sell, or hold any security. Views and opinions are
current as of the date of this material and may be subject to change,
they should not be construed as investment advice.
This material is provided for informational purposes only and should
not be construed as investment advice or an offer or solicitation to
buy or sell securities. This material is not intended to be used as a
general guide to investing, or as a source of any specific investment
recommendations, and makes no implied or express recommendations
concerning the manner in which any client’s account should or would be
handled, as appropriate investment strategies depend upon the client’s
investment objectives.
Although certain information has been obtained from sources believed
to be reliable, we do not guarantee its accuracy, completeness or
fairness. We have relied upon and assumed without independent
verification, the accuracy and completeness of all information available
from public sources.
Goldman Sachs Asset Management
The opinions expressed in this white paper are those of the authors, and
not necessarily of Goldman Sachs. Any investments or returns discussed
in this paper do not represent any Goldman Sachs product. This white
paper makes no implied or express recommendations concerning how
a client’s account should be managed. This white paper is not intended
to be used as a general guide to investing or as a source of any specific
investment recommendations.
Examples are for illustrative purposes only and are not actual results. If any
assumptions used do not prove to be true, results may vary substantially.
Index Benchmarks
Indices are unmanaged. The figures for the index reflect the
reinvestment of all income or dividends, as applicable, but do not reflect
the deduction of any fees or expenses which would reduce returns.
Investors cannot invest directly in indices.
The indices referenced herein have been selected because they are well
known, easily recognized by investors, and reflect those indices that
the Investment Manager believes, in part based on industry practice,
provide a suitable benchmark against which to evaluate the investment
or broader market described herein.
Neither MSCI nor any other party involved in or related to compiling,
computing, or creating the MSCI data makes any express or implied
warranties or representations with respect to such data (or the
results to be obtained by the use thereof), and all such parties hereby
expressly disclaim all warranties of originality, accuracy, completeness,
merchantability, or fitness for a particular purpose with respect to any
of such data. Without limiting any of the foregoing, in no event shall
MSCI, any of its affiliates or any third party involved in or related to
compiling, computing or creating the data have any liability for any
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